CA Inter Taxation Mistakes That Cost Marks in January 2027

The CA Inter Taxation mistakes that cost the most marks are small ones: a missed standard deduction, rebate applied without marginal relief, unrounded figures, and GST credit set off in the wrong order. Paper 3 for January 2027 is on Wednesday 6 January, from 2 pm to 5 pm. It has 50 marks of income tax in Section A and 50 marks of GST in Section B, and January 2027 is the last attempt on the Income-tax Act, 1961.

Most marks lost in Taxation are lost after the student already knew the law. The slip is in applying it to the last line of the computation.

TL;DR

• Paper 3: 6 January 2027, 2 pm to 5 pm. Section A income tax 50 marks, Section B GST 50 marks.
• Income tax for January 2027 is the Income-tax Act, 1961 as amended by the Finance Act, 2025. The Income-tax Act, 2025 comes into the Inter paper from May 2027.
• Read ICAI's Statutory Update for January 2027 along with the July 2025 study material.
• Check four things in every answer: regime, standard deduction, rebate with marginal relief, rounding.
• In GST, use IGST credit first and never set CGST credit against SGST.

Which law applies to CA Inter Taxation in January 2027?

ICAI's Board of Studies page for Paper 3, Section A, lists the study material for the May 2026, September 2026 and January 2027 exams, plus a separate Statutory Update for January 2027. That edition carries the Finance Act, 2025 changes, so the rates and slabs you use are those for assessment year 2026-27.

The new Act matters only if you write Taxation again in May 2027. For January, learn one law well.

January 2027 is examined on the 1961 Act with Finance Act, 2025 rates, plus the January 2027 Statutory Update.

Which income tax mistakes cost the most marks?

Forgetting the regime and the standard deduction

The new regime under section 115BAC is the default. Write which regime you are using in the first line. Under the new regime, salary gets a standard deduction of Rs 75,000. Under the old regime it is Rs 50,000. Students who mix the two get every later figure wrong.

Rebate without marginal relief

Here is the example I give every Inter student. A resident individual under the new regime has salary of Rs 13,00,000 and no other income.

• Total income: Rs 13,00,000 less Rs 75,000 = Rs 12,25,000.
• Tax on slabs: nil up to Rs 4 lakh, Rs 20,000 on the next Rs 4 lakh, Rs 40,000 on the next Rs 4 lakh, and 15% of Rs 25,000, which is Rs 3,750. Total Rs 63,750.
• Section 87A gives full rebate only up to Rs 12 lakh of income. But marginal relief caps the tax at the income above Rs 12 lakh, which is Rs 25,000.
• Tax Rs 25,000 plus 4% cess of Rs 1,000 = Rs 26,000.

A student who stops at the slab tax writes Rs 66,300. That is Rs 40,300 too much, and the final figure is wrong.

Rounding

Round total income to the nearest Rs 10 under section 288A and the tax payable to the nearest Rs 10 under section 288B. It takes one line and it is the last line the examiner looks at.

Leaving out exempt items

If the question gives agricultural income or a gift from a relative, show it in the computation with nil and the reason. Silence looks like you missed it.

Regime, standard deduction, rebate with marginal relief and rounding: check these four before you move to the next question.

Which GST mistakes cost the most marks?

Setting off credit in the wrong order

Take a registered person in Maharashtra with input tax credit of CGST Rs 30,000 and SGST Rs 5,000, and output tax of CGST Rs 10,000 and SGST Rs 20,000.

• CGST: Rs 10,000 of the CGST credit pays the CGST in full.
• SGST: the Rs 5,000 SGST credit is used, and Rs 15,000 is paid in cash.
• The remaining Rs 20,000 of CGST credit is carried forward. Section 49 does not allow CGST credit against SGST.

The student who sets CGST against SGST shows nil cash payable and loses most of the marks for that part. If IGST credit is available, use it first, against IGST and then against CGST or SGST.

Wrong tax type

When the supplier's location and the place of supply are in different states, the supply is inter-state and attracts IGST. A Delhi trader delivering goods to a buyer in Jaipur charges IGST, not CGST and SGST.

Claiming blocked credit

Credit on a car with seating for five, bought for a director's use, is blocked under section 17(5). Write the section and the reason when you disallow a credit.

Order of set-off, tax type and blocked credits decide most GST practical marks.

How should a tax computation be set out?

1. State the regime, the assessment year and the residential status in the first two lines.
2. Compute income head by head, with each adjustment on its own line.
3. Show exempt items as nil, with the section.
4. Put calculations longer than one line into numbered working notes.
5. Finish with rounding, rebate, cess and the final tax payable.

Same five steps for every question, so nothing gets skipped under time pressure.

How should you split the three hours?

My split, not an ICAI rule: about 85 minutes for each section and 10 minutes at the end to check the last lines. If one section is going badly, stop at 90 minutes and move. A half-done GST section costs more than a slightly short income tax answer. Confirm the MCQ share for each section on ICAI's latest MTP before the exam.

Our CA Inter January 2027 study plan has the 10-week timetable, and the exam dates post lists every paper.

If you want your tax computations checked before January, Gradehunt's CA Inter test series lets you write by hand and upload, and an ex-examiner returns each paper within 48 hours with step-wise marks and comments. The first paper is checked free.